El Salvador requests Tax Reforms
The Executive Branch of the Government of El Salvador requested for some tax reforms that are currently under study by the Treasury Commission. Part of these has been already approved by the Congress and many others are still under study. The objective of this reform is to reshape approximately US$ 250.000.000 more in taxes than the last year.
Apparently, some reforms have been already approved, such as:
- VAT Reform: All salaries or any other remuneration of equal or similar nature are taxed, as well as memberships, payments or any other way of payment of similar nature that generates consideration of use, enjoyment of goods or services, are also taxed.
- Reform of the INCOME TAX: personal expenses will not be deductible, for instance: buying of lubricants, car parts, maintenance expenses and vehicle insurance whenever it is not related to the activity of the Company.
- An ad valorem tax is created for fuel that will vary between 0.5 and 1 percent, which will have to be paid by the importers and distributors in function of the international oil prices.
- Other reforms consist in creating a new document of tax identification and increase the founds that are destined to the Health Department, from a tax applied to sumptuary goods and to the firearms bearing.
Currently, some other points about the alcoholic beverages tax are being discussed, the limit used to tax the sale of the first house, the establishment of the minimum of necessary income to present the personal Statement of Affairs, the tobacco tax rate, and many other measures that are expected to be approved during the next few days.
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